Fraud defendant takes aim at Alameda County politicians

OAKLAND -- Taking the witness stand to defend herself against accusations she stole public money, a former Alameda County anti-poverty director took aim at a bevy of East Bay politicians this week as she sought to portray the criminal charges against her as retaliation.

Nanette Dillard testified Wednesday that she had trouble working with a 13-member political board she described as neglectful of its duties, divided by racial turmoil and out to get her.

She reserved her sharpest criticism for a former ally, Alameda County Supervisor Nate Miley, accusing him of pushing to get his daughter hired for an internship at the now-dissolved Alameda County Associated Community Action Program.

Dillard said Miley told her that the internship should be "paid, of course. He said, 'You'll scratch my back, and I'll scratch yours.'"

Dillard directed the struggling anti-poverty agency, known as ACAP, for about seven years before the governing board, of which Miley was a longtime member, placed her on leave in February 2011 -- shortly before it disbanded the nearly 40-year-old program.

Seeking to show she was an embattled whistle-blower, Dillard also planned to testify this week -- if the presiding judge lets her -- about how she confronted Miley shortly before her firing about missing federal stimulus money that was owed to her agency. What the county supervisor could have done about the problem, if anything, is unclear.

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Miley declined to comment about the case Wednesday because he is subpoenaed as a potential witness in the drawn-out trial against Dillard and her husband, Paul Daniels, who was a grants manager at the agency. Alameda County has no nepotism policy for its workforce but is crafting one after a civil grand jury criticized the county government in a report published last year.

Prosecutors have accused Dillard and Daniels of conspiring with one another to misappropriate grant money awarded to the agency from the federal government. Defense attorneys have characterized the married couple as dedicated, if overwhelmed, anti-poverty workers brought down by a dysfunctional county finance system and a board of elected officials trying to protect themselves.

After listening for weeks -- the trial began in November in Alameda County Superior Court -- to former employees and public officials testify against her, Dillard got her first chance to share her side of the story with jurors this week. But not all of it.

Judge Allan Hymer said at a hearing Wednesday, while jurors took a lunch break, that he was refusing to allow Dillard to testify about her lawsuit against the ACAP board for wrongful termination -- one that got her and her legal team a $312,000 settlement award and her job formally reinstated -- albeit retroactively.

The board put Dillard on leave during a closed-session meeting after a group of ACAP workers publicly complained about Dillard's leadership.

Alameda County deputy district Attorney Greg Dolge called the job reinstatement a "legal fiction" and irrelevant to the trial. Defense attorneys countered that it vindicates Dillard.

"The prosecution has thrown the kitchen sink at Ms. Dillard," said her attorney, Thomas Mesereau, as he tried to persuade Hymer to let Dillard talk about the lawsuit. "She has to be able to respond. ... They've raised every innuendo they can."

Dillard shot back at East Bay officials with her own innuendo this week, describing three board members who sat on their respective city councils -- Diana Souza of San Leandro, Cheryl Cook-Kallio of Pleasanton and Robert Lieber of Albany -- as "notorious for not reading their board packets." Souza and Lieber testified against Dillard in the trial late last year. And Dillard said a Newark council member and ACAP board member, Ana Apodaca, orchestrated a public campaign against her.

Asked by Mesereau why Apodaca "did not care" for her, Dillard made a long pause before saying she suspected racial bias. Dillard is African-American.

Dillard also spent Tuesday and Wednesday defending actions that prosecutors have characterized as illegal or at least sneaky, including work on her home and her brother's home performed by ACAP clients -- most of them ex-felons -- allegedly at abelow-market rate. Dillard said she used the family homes to try to jump-start a federally funded jobs program that was having trouble getting off the ground.

She defended her overnight visit to the ACAP headquarters in Hayward that happened just hours after she was placed on administrative leave, saying she was just trying to get her belongings without adding to the office turmoil the next morning.

"I had no notion of doing anything clandestine," she said. "There was nothing to hide, there was nothing to hide from."

And she defended her out-of-state travel expenses, including one trip to Las Vegas that prosecutors introduced as evidence but which Dillard said was an important conference that she attended for business, not pleasure.